Why do gas prices rise and fall? 5 driving factors

Why do gasoline prices go up and down so much across the US, and what causes the changes? Here are five key factors that influence gas prices:

3. How about that weather?

Chip East/Reuters/File
Hurricane Irene slams into Asbury Park, New Jersey in August 2011. Irene knocked out power to 3.3 million homes and businesses, forced two nuclear plants to shut and idled oil ports and refining.

Drivers tend to hit the roads more in the summer, driving up demand for gas, and driving up prices as well. In the winter, rough roads and inclement weather encourage motorists to keep the car in the garage – or at least avoid long road trips. That drives demand down, making gas cheaper in the winter.

Weather-related disasters like hurricanes can also push up gas prices. The bulk of American refineries are concentrated near the Gulf Coast, where late summer tropical storms and hurricanes sometimes disrupt both refining capacity and offshore oil drilling. And those disruptions can be passed along to the rest of the country if the coast loses power.

“If the pipelines don’t have electricity they cannot supply gas to the Northeast and Midwest, and you can see prices go up outside of the affected region,” says Green.

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